Mon, Jun 09, 2014 - Page 13 News List

Academia Sinica unveils tax scheme reform report

By Amy Su  /  Staff reporter

Terminating the imputation tax scheme and reforming the property tax system might help the nation compensate for most of its budget gap, which has generally ranged between NT$180 billion and NT$200 billion (US$6 billion and US$6.7 billion) annually over the past few years, Academia Sinica said on Friday.

The suggestions are part of a tax reform package unveiled by Academia Sinica, which formed a task force late last year to propose recommendations to the government regarding national debt problems and tax injustice.

ADDITIONAL REVENUE

“The reform in the two tax systems might help the nation generate an additional NT$140 billion or more in tax revenue annually,” Institute of Economics research fellow and task force member Chen Been-lon (陳明郎) told a media briefing.

The Ministry of Finance’s fiscal reform package, which was unveiled in February, also aims to tackle the imputation tax system, which was designed to eliminate double taxation on a corporation’s earnings.

Academia Sinica on Friday called for the government to cancel the imputation tax in the long term, although it should maintain tax exemption at NT$270,000 to target taxpayers who pay large amounts.

ASSESSMENT VALUES

Academia Sinica said the government should raise its assessment values for land and houses to more closely reflect market prices. The institute also urged authorities at local government-level to boost their house tax rates to the maximum limit as a short-term measure.

In the long term, the government should continue to impose a capital gains tax on property transactions to ensure fair taxation, the research institution said in the report.

Academia Sinica researchers said the nation’s debt ratio is relatively steady compared with other countries’.

The ministry’s data indicate that outstanding balance of the central government’s long-term debt could amount to 38.09 percent of average GDP for the three years from 2012 to this year.

EQUITABLE

The institute said the government still has to make the nation’s tax burden more equitable than its current 12.8 percent through various reform measures to business, energy and commodity taxes.

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